What is to stop say the American government making a bitdollar, pinning the price against the bitcoin and forcing is acceptance as legal tender? Surely this would effectively deflate the value of a bitcoin?
Gresham's Law will kick in and as more "bit dollars" are printed, bitcoins will become more valuable than "bitdollars". While a "bitdollar" might be officially worth 1 bitcoin, nobody would trade them 1 for 1.